Alibaba was one of the favourites among Chinese stocks last year, before its price retreated at the fag end.
- Alibaba shares gained by over 10% on Monday.
- The stock's weak run over the last few months worried investors and analysts.
- Growth in Qwen AI users, along with China's interest in the food-delivery space to rein in competitive spending, have added positive momentum to the stock recently.
Alibaba Group’s stock declined 1.4% in early premarket trading on Tuesday, following a 10% surge in the previous session that revived interest in the Chinese tech giant after months of underperformance.
Latest Catalysts
Monday’s gains came amid news that Alibaba’s Qwen AI models had surpassed 700 million downloads on code-sharing platform Hugging Face, with December's downloads exceeding those of the next eight models combined.
Stocks of domestic rivals Baidu and JD.com also jumped by more than 6% and 4%, respectively, on Monday as the Chinese government reportedly issued pledges to boost and financially support AI integration with manufacturing.
Last week, media reports also emerged that Alibaba is planning to purchase more than 200,000 Nvidia H200 chips to bolster its large language models, marking a significant investment in its cloud business as AI demand surges and advanced chip supply remains tight.
Meanwhile, China’s market regulator launched an investigation into the country’s food delivery sector over concerns of anti-competitive practices. That boosted shares of food-delivery companies, including Alibaba, which operates the Ele.me service, as investors bet that the government intervention would stabilize pricing and margins.
Stock Moves
Alibaba was one of the favourites among Chinese stocks last year, before its price retreated at the fag end. Two marquee U.S. brokerages, JPMorgan and Jefferies, even lowered their price targets on BABA earlier this week. However, the stock has rebounded strongly in the new year (up 13.5%), sparking widespread buzz among retail investors.
Stocktwits sentiment was ‘extremely bullish’ as of early Tuesday, and has toggled only between ‘bullish’ and ‘extremely bullish’ this month, while message volume has soared by over 460% in the past week. Furthermore, about 70% of respondents to a Stocktwits poll believe BABA’s upward momentum would continue.
The rally follows incredible strength in Chinese tech stocks. The CSI 300 Index has risen about 3% in 2026. Hong Kong’s Hang Seng Tech Index has advanced by more than 6% since the start of January.
However, BABA stock is still down 12.2% from its lifetime high of $192.67, reached on Oct. 2.
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